It’s hard to deny that digital coupon distribution is poised for a breakout year. According to Scarborough Research, 11% of US households printed coupons via the internet in 2007 (up 83% since 2005!) That figure has no doubt grown since this study was executed, given the multiple price advances manufacturers were forced to take in the first half of 2008.
To add some perspective to this, newspaper FSIs still reign supreme for reach in coupon delivery, with 53% of households obtaining coupons through this medium (up just 8% since 2005). And other delivery vehicles such as in-store, direct mail and product packaging will continue to have their place.
But CPG marketers now have some pretty interesting choices with how to deliver coupons to consumers in the digital realm. Here are three different approaches that all have their pros and cons:
1. Printable coupons - Consumers visit coupons.com (or one of their distribution partners), select desired coupons, print locally and then redeem during their next shopping trip. The initial fear some manufacturers (and many retailers) had with printable online coupons is print fraud. And to an extent, the concerns are still very real. Coupons, Inc. has invested significant R&D into minimizing unauthorized prints, but fraud persists. Still, this approach accounts for the vast majority of digital coupon distribution to date.
2. Loyalty card integration- This approach is intriguing, as it eliminates the print fraud concern and provides a more streamlined consumer experience. In this case consumers select desired coupons online and electronically “deposit” the coupon as stored value onto their retail loyalty card. During their next shopping visit, the value is automatically deducted from their card if the qualifying item is purchased. The big hitch with this approach is that participation today is limited to Kroger and its affiliate retail banners. AOL’s Shortcuts and SoftCoin’s eCoupon program for P&G are the two technology providers driving this innovation.
3. Mobile delivery – This model is still in its infancy, but offers a rich opportunity to engage consumers in a more meaningful way. One entry point is to offer and deliver mobile coupons to consumers during the shopping trip, while a buying decision can be affected. Companies like Cellfire can push discount offers to a mobile phone and/or leverage electronic value deposit to select retail loyalty cards, as in approach #2 above.
It’s an exciting time to be driving a digital marketing strategy for today’s consumers. And within the world of digital coupon delivery, brand marketers have a pretty interesting array of choices to draw from.